Here are the answers to recent questions that I received about Tax Sale Overages, Getting Started With Tax Lien Investing, and Investing With A Self-Directed IRA….
Tax Sale Overages
Recently I’ve gotten a lot of questions about tax sale overages. Many of you have specific questions for various states about tax sale overages and finder’s fees.
Answer:
My expertise is with tax lien and tax deed investing. But Rick Dawson is THE expert on this topic and he’s answered quite a few specific questions about tax sale overages and getting finder’s fees on my blog at https://taxlieninvestingtips.com/?p=1074. In fact you’ll see over 100 comments on this blog post – half of them are questions and the other half are answers – mostly from Rick. So if you have a question about tax sale overages go over to https://taxlieninvestingtips.com/?p=1074 and read through the comments to see if your question – and the answer, is there. If not feel free to leave your question or comment for Rick.
I’ve also got a few questions about Rick’s Hooked On Overages course. It was available for a while at a discounted price, but now Rick is Updating the course and the digital version is no longer available. But hang in there because I know that he’ll be coming up with a new version and I’m hoping to be able to make it available to you at an introductory price. In the mean time you can sign up for his free report about how to get 5 figure finder fees at www.taxlienlady.com/taxsaleoverages.
Is Tax Lien Investing Right For Me?
I’ve been doing some research on investing in tax liens and deeds. I am very excited about getting started, I am just unsure if this is the right choice for me. I work 2 jobs and I am unable to travel to different counties for tax sales auctions and purchasing over the counter tax liens/deedsonline can be pretty risky, what advice would you recommend in order for me to get started?
Answer:
There are 2 ways that busy people who don’t want to travel to other states to invest in tax liens or tax deeds can get started. If you have a fair amount of money (a minimum of $25,000) to invest but you don’t have the time to the work required, you can invest in a tax lien fund or with a tax lien agent. You can find out more about the tax lien fund and the tax lien agents that I recommend by clicking on those category links on the right side bar of this blog.
If you don’t have at least $25,000, but you do have $5,000 or more, then I suggest that you start with the online tax sales. There are online tax lien sales and online tax deed sales in various parts of the country throughout the year. You can search this blog for more information on the online tax sales. And if you need help with this you can check out my Buying Tax Liens Online course at www.BuyingTaxLiensOnline.com or my Online Tax Deed Sales course at www.OnlineTaxDeeds.com.
For the online tax deed you will need more than $5,000 to get started though. Remember that with tax deeds you actually purchasing the property and the price of the deed is bid up at the tax sale. Generally you will need at least $10,000 to get started and in some states you will need a lot more.
If you only have $2000 to start with I suggest that you either keep saving until you have at least $5000, or partner with someone else who can do the work for you and split the profits.
401K Rollover
Hello…love your investment tips…I however have a question…can I convert my current 401K account into a ROTH IRA to take advantage of the tax liens and divert any capital gains until I retire…
Answer:
I am not a retirement account expert, but attorney Tim Berry is and you can contact him at tim@iraideas.com. What I have learned in the past couple of years is that it’s better to convert to a solo 401K with checkbook control then it is to rollover your 401K account to a SDIRA. There are couple of reasons for this – one is that if you make a mistake with your IRA, the government is likely to disregard your entire account and force you to pay taxes on all of it. If that happens with a 401K, they are more likely to only penalize you for the amount that your erred on.
Another reason is that you can borrow half the amount (up to $50,000) from your 401K and pay yourself back (with a small amount of interest) over 5 years. You can’t do that with an IRA. And yes you can have a Roth Solo 401K. You do have to have your own business to have a solo 401K, but it could be a sole propietorship. In today’s economy everyone should have a hobby that could turn into a business if they had to anyway! Find out more about the benefits of a solo 401K over an SDIRA by watching the replay of a webinar that I did with Tim at https://taxlieninvestingtips.com/?p=1921.
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